CONSUMERS and small firms are beginning to feel more confident about taking on debt as the economic landscape improves, according to Royal Bank of Scotland’s head of commercial banking.
However, the most recent figures from the Bank of England’s Funding for Lending scheme, designed to improve the flow of credit to small firms, show RBS’s net lending in the first quarter of the year was £107 million – the same as “challenger” bank Shawbrook and some way behind the £425m lent by Lloyds Banking Group.
“There’s always a bit of a lag while the economy recovers, but we’re definitely seeing more confidence across the sectors,” Alison Rose told Scotland on Sunday.
A report by former Bank of England deputy governor Sir Andrew Large in 2013 found that up to 10 per cent of small firms rejected at a pre-application stage may have been suitable for financing, but Rose insisted the bank was “making progress”, with two-thirds of lending decisions now made locally.
Rose, chief executive of commercial and private banking at the group, said: “Ultimately, bankers understand the market and customers, and that local knowledge is important – customers need a decision quickly because they have a business to run.”
In January, RBS followed in Santander UK’s wake by launching a tie-up whereby small firms rejected for a loan would be referred to peer-to-business lenders, and Rose said growth in the alternative finance arena was “a positive dynamic”.
Referring to the bank’s latest “unacceptable” IT glitch, which last month saw payments for about 600,000 customers delayed, she said: “We are looking into the root cause to make sure it doesn’t happen again.”